The current state of the economy has resulted in many challenges for Americans. Foreclosures are at record highs, unemployment is very high and we are in the worst recession since The Great Depression. Times are tough, but we must adapt. Savvy investors see this time as an opportunity to make some of the best investments of their lives. In 30 years, we will talk about how we could buy properties for almost nothing during this recession and we wish we bought 300 more doors. This time is not without risk, below are 6 tips for investing in tough times.
- Find the best deals – with so many available deals, savvy investors should get a ton of prospects into their pipeline, weed out the duds and cherry pick only the best ones. Stick to your criteria and walk away if the deal is not good enough because there are 10 more like it and many will be good enough.
- Generate private money and financing solutions – Financing is a challenge and cash is king. Generate private money and have financing solutions in place.
- Show a successful track record in good times and bad – Investors that defy the odds and have success in good times and bad are in a great position to have continued success.
- Mitigate risk by having multiple exits – One exit strategy is not enough. Always have backup plans, be ready for worst case scenarios and mitigate risk with multiple exit strategies. Tremendous equity and tremendous cash flow is a must.
- Do not take unneeded risks – Never ever do a deal that is not a smoking deal during tough times. Do not ask questions, just do not do it!
- Do your due diligence – Always be thorough in your due diligence. You can avoid many unpleasant surprises when buying. When selling, always qualify buyers with your lender so you do not waste months in escrow and have the buyer’s financing fall through.